In news set to warm the cockles of any home-owners heart and keep the hopes of the vested interests on a high are the reports that, according to the Halifax, average UK house prices rose once again in November. According to Halifax another 1.3% or so was unexpectedly added to the average value of a house last month, which is now some 4.8% higher than Dec last year. This is being put down to higher recent demand and a suppressed supply.
There is the prospect Halifax said of flat prices in 2010, depending on the economy as a whole and the numbers of property coming onto the market. But RICs seem to be taking a more buoyant approach saying that the supply of fresh property will continue to lag buyer demand in the near term.
The figures are also mirrored in the Nationwide price index although the very recent rises seen by them have been much more modest.
But with the reinstatement of the lower stamp duty band and the increase in VAT (unless a government announcement is in the offing) it is hard to see how things can do much more than stay level.
When considering the recent depressing news of impending tax hikes and public sector pay and service cuts it is hard to see how the market can do anything other than drop significantly over the next months probably years. Especially as many of these measures may stress household budgets beyond breaking point over the coming year. Then there is the question of when does quantitative Easing get unwound? As well as the question of mortgage lending returning to some semblance of normality.
Be in no doubt the government, be it Tory, Labour or (don’t laugh) LibDem, will do everything it can to prevent any more collapse than can possibly be avoided. This will mean delayed public sector cuts and taxes that actually affect the few immediately but the many in about 2011, with a plethora of ‘initiatives’ that say a lot but deliver little if anything.
Anyone who is expecting an economic turnaround that will reinstate the tax take and save us and the housing market will be in for a bit of a shock despite who you vote for.
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Tags: economics, finance, house price news, House Prices, News, residential housing
Without doubt the current and proposed tax take is falling short of the amount required.
(See Spooks tonight at 9.00pm on BBC1)
Therefore the books must be balanced soon.
We may get forced by the providers of our debt before the election arrives.
It’s my opinion that the ‘house price chart’ may in fact form a double top or close to it before falling away again.
In my locality there are several houses that haven’t sold but are now empty and up for rent.
The inhabitants I assume have been unable to resist the opportunity to upgrade and have become accidental landlords.
This in a market with reduced takers for rental properties as people have been buying.
A dangerous game is being played by some.
Rising interest rates could spell a quick end to price rises and re-instate significant falls as next time around there won’t be any money left to throw at the housing market – election or not.